Nigeria's Central Bank Again Warns on Crypto Investments

The Central Bank of Nigeria has issued another warning to residents and financial institutions over the risk of cryptocurrency investments.

Mar 1, 2018 at 4:10 p.m. UTC
Updated Sep 13, 2021 at 7:37 a.m. UTC

The Central Bank of Nigeria (CBN) has reiterated its warning against cryptocurrency investments.

In a press release issued Wednesday, the CBN warned residents and financial institutions that cryptocurrency investments are unprotected, and investors face risks such as exchange bankruptcy and market volatility.

The release states that dealers in cryptocurrency, such as NairaEx, a Nigeria-based bitcoin trading platform, are "not licensed or regulated by the CBN."

The commentary follows previous messages sent to Nigerian financial institutions in early 2017, in which the CBN advised domestic banks to distance themselves from cryptocurrencies, warning "not to use, hold or transact in any way with the technology."

Despite that, the remarks come at a time when Nigeria has seen growing interest in cryptocurrency investments. According to data from Coindance, weekly trading volume on Localbitcoins in Nigeria surged 500 percent in 2017.

As previously reported by CoinDesk, Nigeria was among the top countries using the "bitcoin" search term, according to Google Trends in 2017, alongside South Africa, Slovenia, Netherlands and Austria.

However, according to a report by Quartz Africa, partially accounting for Nigeria's internet search levels – in addition to controls placed on the country's capital outflow – is a bitcoin-related Ponzi scheme that reportedly resulted in 2 million residents losing a combined $50 million in early 2017.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Exploring the Star Atlas Metaverse

A review on the space-themed, multiplayer gaming metaverse based on the Solana blockchain.

A review on the space-themed, multiplayer gaming metaverse based on the Solana blockchain.

CoinDesk - Unknown
2
CoinDesk - Unknown
Argentinian Crypto Exchange Buenbit Cuts 45% of Staff Due to Tech Industry Downturn

The company will focus on its current operations in Argentina, Mexico and Peru, and freeze previous plans to expand into other countries.

The company will focus on its current operations in Argentina, Mexico and Peru, and freeze previous plans to expand into other countries.

CoinDesk - Unknown
3
CoinDesk - Unknown
Bitcoin Range-Bound; Support at $27K, Resistance at $33K

Technical indicators are neutral, and upside appears limited from here.

Technical indicators are neutral, and upside appears limited from here.

CoinDesk - Unknown
4
CoinDesk - Unknown
How Do You Value Metaverse Projects? We Tried. Here’s What We Found

On a per-user basis, the valuations for Decentraland, Axie Infinity and The Sandbox look quite high. But just picking the right metric is tough in this loosely defined niche.

On a per-user basis, the valuations for Decentraland, Axie Infinity and The Sandbox look quite high. But just picking the right metric is tough in this loosely defined niche.

CoinDesk - Unknown